Bank Secrecy Act/Anti-Money Laundering Examination Manual - ffiec

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Politically Exposed Persons — Examination Procedures Determine compliance with regulatory requirements and with the bank’s established policies, procedures, and processes. Review transaction activity for accounts selected. If necessary, request and review specific transactions. If the analysis of activity and customer due diligence information raises concerns, hold discussions with bank management. 7. On the basis of examination procedures completed, including transaction testing, form a conclusion about the adequacy of policies, procedures, and processes associated with PEPs. FFIEC BSA/AML Examination Manual 266 7/28/2006
Embassy and Foreign Consulate Accounts — Overview Embassy and Foreign Consulate Accounts — Overview Objective. Assess the adequacy of the bank’s systems to manage the risks associated with transactions involving embassy and foreign consulate accounts, and management’s ability to implement effective due diligence, monitoring, and reporting systems. Embassies contain the offices of the foreign ambassador, the diplomatic representative, and their staff. The embassy, led by the ambassador, is a foreign government’s official representation in the United States (or other country). Foreign consulate offices act as branches of the embassy and perform various administrative and governmental functions (e.g., issuing visas and handling immigration matters). Foreign consulate offices are typically located in major metropolitan areas. In addition, foreign ambassadors’ diplomatic representatives, their families, and their associates may be considered politically exposed persons (PEPs) in certain circumstances. 214 Embassies and foreign consulates in the United States require access to the banking system to meet many of their day-to-day financial responsibilities. Such services can range from account relationships for operational expenses (e.g., payroll, rent, and utilities) to inter- and intragovernmental transactions (e.g., commercial and military purchases). In addition to official embassy accounts, some banks provide ancillary services or accounts to embassy staff, families, and current or prior foreign government officials. Each of these relationships poses different levels of risk to the bank. Embassy accounts, including those accounts for a specific embassy office such as a cultural or education ministry, a defense attaché or ministry, or any other account, should have a specific operating purpose stating the official function of the foreign government office. Consistent with established practices for business relationships, these embassy accounts should have written authorization by the foreign government. Risk Factors To provide embassy and foreign consulate services, a U.S. bank may need to maintain a foreign correspondent relationship with the embassy’s or foreign consulate’s bank. Banks conducting business with foreign embassies or consulates should assess and understand the potential risks of these accounts and should develop appropriate policies, procedures, and processes. Embassy or foreign consulate accounts may pose a higher risk in the following circumstances: • Accounts are from countries that have been designated as high risk. • Substantial currency transactions take place in the accounts. 214 Refer to the expanded overview section, “Politically Exposed Persons,” for additional information, page 261. FFIEC BSA/AML Examination Manual 267 7/28/2006
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Bank Secrecy Act / Anti-Money Laund
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Table of Contents Examination Proce
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INTRODUCTION Introduction This Fede
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Background Introduction In 1970, Co
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U.S. Treasury Introduction The BSA
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Introduction international narcotic
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Introduction Other legitimate sourc
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Scoping and Planning — Overview C
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Scoping and Planning — Overview T
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Scoping and Planning — Examinatio
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Scoping and Planning — Examinatio
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BSA/AML Risk Assessment — Overvie
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BSA/AML Risk Assessment — Overvie
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• High Intensity Financial Crime
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Examiner Development of a BSA/AML R
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BSA/AML Risk Assessment — Examina
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BSA/AML Compliance Program — Over
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BSA/AML Compliance Program — Exam
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BSA/AML Compliance Program — Exam
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Independent Testing BSA/AML Complia
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Developing Conclusions and Finalizi
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Developing Conclusions and Finalizi
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Customer Identification Program —
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Customer Information Required Custo
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Transaction Testing Customer Identi
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Customer Due Diligence — Overview
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Customer Due Diligence — Examinat
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Suspicious Activity Reporting — O
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Law Enforcement Inquiries and Reque
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Suspicious Activity Reporting — E
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CTR Backfiling Currency Transaction
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Currency Transaction Reporting —
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Annual Review Currency Transaction
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Currency Transaction Reporting Exem
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Currency Transaction Reporting Exem
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Information Sharing — Overview wi
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Information Sharing — Overview ap
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Examination Procedures Information
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Information Sharing — Examination
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Contemporaneous Purchases Purchase
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Purchase and Sale of Monetary Instr
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Responsibilities of Originator’s
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Funds Transfers Recordkeeping — O
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Funds Transfers Recordkeeping — O
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Foreign Correspondent Account Recor
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Private Banking Due Diligence Progr
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Special Measures — Overview minim
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Examination Procedures Special Meas
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Foreign Bank and Financial Accounts
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International Transportation of Cur
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Office of Foreign Assets Control
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Enterprise-Wide BSA/AML Compliance
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Foreign Branches and Offices of U.S
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Examination Procedures Parallel Ban
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Correspondent Accounts (Domestic)
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Correspondent Accounts (Domestic)
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large currency transactions. Corres
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Correspondent Accounts (Foreign)
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Correspondent Accounts (Foreign)
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U.S. Dollar Drafts — Overview U.S
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U.S. Dollar Drafts — Examination
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Payable Through Accounts — Overvi
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Payable Through Accounts — Examin
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Payable Through Accounts — Examin
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Risk Mitigation Pouch Activities
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Pouch Activities — Examination Pr
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Electronic Banking — Overview lin
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Funds Transfers — Overview Funds
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Funds Transfers — Overview • Di
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Risk Mitigation Funds Transfers —
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Funds Transfers — Examination Pro
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Automated Clearing House Transactio
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Transaction Testing Automated Clear
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Electronic Cash — Overview Using
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Third-Party Payment Processors —
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Third-Party Payment Processors —
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Brokered Deposits — Overview Brok
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Examination Procedures Brokered Dep
Page 219 and 220: Privately Owned Automated Teller Ma
Page 221 and 222: Privately Owned Automated Teller Ma
Page 223 and 224: Privately Owned ATMs — Examinatio
Page 225 and 226: Nondeposit Investment Products —
Page 231 and 232: Insurance — Overview Insurance
Page 233 and 234: • The identification of high-risk
Page 235 and 236: Insurance — Examination Procedure
Page 237 and 238: Concentration Accounts — Overview
Page 239 and 240: Lending Activities — Overview Len
Page 241 and 242: Examination Procedures Lending Acti
Page 243 and 244: Trade Finance Activities — Overvi
Page 245 and 246: Trade Finance Activities — Overvi
Page 247 and 248: Private Banking — Overview Privat
Page 249 and 250: Private Banking — Overview allow
Page 251 and 252: • The current source of funds for
Page 253 and 254: Examination Procedures Private Bank
Page 255 and 256: Trust and Asset Management Services
Page 261 and 262: Nonresident Aliens and Foreign Indi
Page 263 and 264: Nonresident Aliens and Foreign Indi
Page 265 and 266: Politically Exposed Persons — Ove
Page 267 and 268: Risk Factors Politically Exposed Pe
Page 269: Politically Exposed Persons — Exa
Page 273 and 274: Embassy and Foreign Consulate Accou
Page 275 and 276: Non-Bank Financial Institutions —
Page 281 and 282: Professional Service Providers —
Page 283 and 284: Professional Service Providers —
Page 285 and 286: Non-Governmental Organizations and
Page 287 and 288: Non-Governmental Organizations and
Page 289 and 290: Business Entities (Domestic and For
Page 297 and 298: Cash-Intensive Businesses — Overv
Page 299 and 300: Appendix A: BSA Laws and Regulation
Page 305 and 306: Appendix B: BSA/AML Directives Appe
Page 307 and 308: Web Sites Appendix C: BSA/AML Refer
Page 309 and 310: • Federal Register notices. • E
Page 311 and 312: Appendix D: Statutory Definition of
Page 313 and 314: Appendix E: International Organizat
Page 315 and 316: Appendix F: Money Laundering and Te
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Appendix F: Money Laundering and Te
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Appendix G: Structuring Appendix G:
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Appendix H: Request Letter Items (C
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Nonresident Aliens and Foreign Indi
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Cash-Intensive Businesses Appendix
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Appendix J: Quantity of Risk Matrix
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Appendix J: Quantity of Risk Matrix
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Appendix L: SAR Quality Guidance Ap
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Appendix M: Quantity of Risk Matrix
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Appendix N: Private Banking — Com
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Appendix O: Examiner Tools for Tran
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Appendix P: BSA Record Retention Re
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• Name of purchaser. • Date of
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Appendix P: BSA Record Retention Re
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Acronym or abbreviation Full name A
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Acronym or abbreviation Full name I
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Acronym or abbreviation Full name R
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